Central banks lead the news, if we can call it that. The news are old news, meaning no news. Or something like that. Both European Central Bank and Bank of England held their monetary policy meetings today. Outcome was very similar – no changes. Rates for EUR remain at 1%, while UK benchmark stays at 0.5%. Markets seem to be preoccupied with the still not materialized Greece bailout, and the ever changing plans for it. Story is different every day, while the interest rates, well, are not.
Meanwhile Bank of Japan is rattling saber again over the strength of Yen. They are not talking about intervention directly, at least not yet, but announced raising ceiling on the foreign exchange account, which holds funds to be used for possible intervention. Limit in this account is to be pumped up by over $56.5 billion, to some new ridiculous level. By some accounts, Japanese authorities have on hand about six times the amount of proposed increase. These funds are immediately available, with the new $56.5 to be approved after April first. We’ll see what happens next.
I have been looking at GBP over last few days, trying to buy it against most other crosses. Press is universally ready to bury the Pound, but I don’t think it will happen just yet. Price movement late on Sunday and early Monday indicates possible bottom, at least for the time being. In the last post trade in GBP-CHF was talked about. It is still under, moving slowly in the desired direction. Hopefully it gets there. Next on the list were EUR-GBP and GBP-NZD. The first is still waiting for a move to 0.9000 and below, but Pound-Kiwi has already made good progress.
It started to turn early, soon after GBP-CHF was entered. Price made a minor low at 2.1530. Move above was a buy, at 2.1550, to accommodate for the large spread. Objective for this position was the gap formed on Sunday.
Trade tuned out very good, bringing 220 pips in less than a day. I’m leaving this cross alone and moving on to other one.
Pound-Aussie started to climb up, too, ever so slowly. Trice established resistance, which was broken at 1.6691 yesterday. Not much progress since the, with price currently at around entry level. target is fairly large 1.6970. At present rate, it will be a while before I see it.
GBP-CAD is lagging behind. Price ran into strong resistance at 1.5600, which still holds. That’s where I have a buy order, at 1.5615 to be precise. objective is also large, almost 1.6000. Frankly, I’m glad it is all playing out the way it is, because if I’m wrong and Pound undergoes another sell off, it wouldn’t be very pretty to sit on all these trades at the same time. This way risks are spread out not only among currency pairs, but also over time.
Mike K.
hi mike,
what is your stop on gbpcad – 150pips?
thomas
Yes, Thomas. If the trade happened right now, 150 pips would be stop.
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Hi Mike,
Pound did very well on Friday. How did your trades turn out? Are you still in gbp/aud?
“With commodity currencies still strong, GBP-CHF and EUR-GBP were better prospects.” What changed this? I see in the latest post you are short them (AUD etc.).
Heather, see next post.
Prudy, charts jus looked better for these pairs. But I’m still in Pound trades against AUD and CAD.
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